Competitive behavior, impact on others, and the number of competitors

•An increase in size of the reference group increases the level of competitive behavior.•Effect holds only where competitive behavior reduces future earnings of the group members.•Effect falls further when respondents also anticipate future interactions with the reference group.•Norms explain competitive behavior better than emotions.

This paper investigates changes in competitive behavior that follow from changes in: (1) the impact of competitive behavior on others; and (2) the size of the competitive reference group. Using a 2 × 3 between-subjects design, we asked participants whether they would work more hours (i.e., “compete”) in return for an increase in pay, varying: (1) group size – small (n = 4) or large (n = 40); (2) whether there is impact on others or not; and (3) given impact on others, whether there is future interaction or not. We find that when competitive behavior has no impact on coworkers (i.e., the baseline), the size of the competitive reference group does not influence the level of competitive behavior. If we allow the competitive choice to reduce the earnings of coworkers: (1) the level of competitive behavior falls relative to the baseline; and (2) increases in the size of the competitive reference group increase the level of competitive behavior. The level of competitive behavior falls further when respondents also anticipate future interactions with the reference group.